The Employment Laws Governing Employers With 25 or Fewer Employees
Smaller companies, such as those with fewer than 25 employees, may not have to follow some of the laws that regulate employment and labor in the United States. The laws establish guidelines for compliance and exempt smaller companies, recognizing that compliance may impose a hardship on companies with fewer resources. The U.S. Department of Labor and state labor departments administer and enforce employment laws.
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Fair Labor Standards Act
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The Fair Labor Standards Act (FLSA), the main federal employment law, may cover employers with 25 or fewer employees. The criteria for coverage are yearly gross sales of $500,000 or business that involves any kind of interstate commerce. The FLSA sets a minimum wage and rules for overtime pay, as well as record-keeping requirements for employers. Regarding the employment of minors, the FLSA designates certain hazardous occupations as off limits and restricts hours of work.
Family and Medical Leave Act
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The Family and Medical Leave Act (FMLA) most likely does not cover employers with 25 or fewer employees. Its provisions apply to employers with 50 or more employees for at least 20 weeks during the current year or the year prior. Thus, it may cover employers with fewer than 25 employees if they recently have had layoffs. It also covers all public agencies regardless of size. The FMLA requires 12 weeks of unpaid leave per year for eligible employees who need time off to give birth, adopt a child, recover from a serious illness or tend to an immediate family member who is seriously ill.
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Equal Employment Opportunity
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Federal discrimination laws cover some employers with 25 or fewer employees. The Civil Rights Act applies to companies with 15 or more employees and bars any sort of employment discrimination based on factors such as race, gender, ethnicity, national origin and religion. The Americans With Disabilities Act prohibits discrimination against employees with disabilities and, like the Civil Rights Act, covers employers with at least 15 employees. The Age Discrimination in Employment Act covers employers with at least 20 employees. In accordance with the laws, employers may not discriminate in areas such as recruitment, hiring, discharge and layoffs, wages, promotions and benefits.
State Laws
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All states have their own sets of labor laws, which may differ from federal requirements. Unlike federal labor laws, state laws cover the vast majority of smaller employers as well, although some states may exclude employers with only a handful of employees. State minimum wages may be higher or lower than, or equal to, the federal minimum wage. As of 2011, for example, 17 states and Washington, D.C., had higher minimum wages than the federal minimum wage, while nine states had a lower minimum wage or no minimum wage. Overtime laws work differently in certain states, such as California and Colorado, than at the federal level.
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References
- U.S. Department of Labor: Handy Reference Guide to the Fair Labor Standards Act
- U.S. Department of Labor: The Family and Medical Leave Act of 1993
- The U.S. Equal Employment Opportunity Commission: Enforcement Guidance on EEOC
- U.S. Department of Labor: Minimum Wage Laws in the States -- January 1, 2011
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